1 - Clearly we listen to music differently. If I'm underground for 15/20 minutes the buffer isn't going to keep up and there will be interruptions. Why interact with your media like that when you have a device that's an iPod and a phone? Why not just carry a phone and a CD player? If I'm going to be switching my music out all the time anyway (wasn't that what MP3 players were designed to prevent?) I may as well carry it with me.
2 - Cost isn't an issue for me either since I have unlimited, but again, not the point. Why should I have to pay on a tiered plan to access my own music that can't even be streamed? We're not talking about instant access here, it's downloading tracks and albums I already have access to, which again, seems pointless.
3 - Because there are many people that don't like to listen to just singles? Again, this may be an age or listening to music difference, but there's more out there than just top forty and Lady Gaga. While I agree that I'm not listening to the entireity of every album I own every time I leave the house, why should I have to choose what I take with me? Again, Apple set the precident when they increased the capacity of the iPod from 5GB (you can get 160 these days). By your reasoning, that never should have happened. There are countless situations where I can justify having more space on me. how many times can I say the same about wanting less physical storage? Never. I just may be missing the appeal of having less convenient access to your media, but there's no logical reason to download and wait to access music that you posses already.